Fundrise is one of the best real estate crowdfunding platforms due to its product offerings, historical performance, and innovation. They were founded in 2012 and have grown to become the leading real estate marketplace today. This post will cover Fundrise historical investment returns since inception. It's always good to perform due diligence before making any investment.
Real estate is also my favorite asset class to build wealth because it's easier to understand, is a tangible asset, is less volatile, and provides an income stream. Unlike stocks, real estate doesn't just lose massive value overnight as we saw during the March 2020 coronavirus pandemic sell-off.
In addition, I like Fundrise because they've always had a very measured response during good times and bad times. They aren't constant cheerleaders just to attract as much capital as possible.
An example of their steadiness is their annual outlook newsletter for 2020, which they sent out before the stock market began melting down.
Fundrise Investment Outlook 2020 (previous newsletter)
Looking ahead in 2020, we continue to have a very similar outlook as we’ve had in years past. Asset prices, by almost any measure, are more expensive today than they were 12 months ago. To use the stock market as a convenient example, you’d be hard pressed to ignore the fact that prices were up nearly 30% in 2019, while earnings remained essentially flat.
We were hesitant to be a long-term buyer of consensus-driven assets at last year’s prices. Now we’re only that much more resistant to pay a 30% higher price for the same assets today.
Some may call this approach too conservative, but our belief is that the investors who have achieved consistent success spanning multiple decades tend to spend more time protecting against the downside than they do regretting the upside they may have missed.
As those who have been with us over the years have undoubtedly heard us say before:
We are wary when broader market sentiment is overwhelmingly positive and caution against assuming current trends cannot reverse unexpectedly, especially when everyone starts to believe they won’t.
It’s entirely reasonable that prices may remain elevated for an extended period of time due to a permanently low interest rate environment (or at least that’s now the popular viewpoint). While there are good arguments for this belief, it sounds suspiciously like the “this time is different” refrain from bubbles past.
What I like about Fundrise's newsletter is that there wasn't any sense of FOMO, or fear of missing out. They refused to loosen their underwriting standards, and as a result, I believe their platform portfolio will significantly outperform the S&P 500 in 2020.
Fundrise 2024 Real Estate Outlook
Here's a conversation I had with Ben Miller, Founder and CEO of Fundrise about his outlook for real estate in 2024 and beyond.
I'm actually really excited about the new Fundrise Innovation Fund, which invests in private growth companies in the artificial intelligence space and more.
Fundrise Historical Investment Returns
Now let's take a look at Fundrise historical investment returns. Below are the various ways in which Fundrise has performed since inception. Given Fundrise has eREITs, eFunds, and individual deals, we most look at Fundrise's historical investment performance in various ways.
Below is a chart of how the Growth eREIT performed from July 2016 through January 15, 2020. As you can see in the chart, the has been steady upward returns since inception. It looks like Fundrise is assuming a hypothetical step up function in performance in early 2020.
Below is another chart depicting Fundrise historical investment returns of their eREITS and eFUNDS over a 1 year, 2 year, and 3 year period. You can also see the cumulative returns as well.
Below is a return chart that compares the steady growth of Fundrise's platform portfolio with the Vanguard Total Stock Market ETF (S&P 500 index ETF). What you'll notice is the much steadier growth versus a much more volatile performance of the stock market.
Fundrise Outperformed During Bear Markets
Notice how Fundrise outperformed in 2015 and 2018, when the stock market was weakest. I expect Fundrise to outperform again in 2020 because real estate tends to outperform stocks in a downturn up to a certain point.
Finally, below is a simple way to compare the Fundrise platform portfolio with the S&P 500 and a Vanguard real estate ETF. Fundrise is much less volatile. For those investors seeking less volatility, more diversification, and do not want to take on a mortgage to buy individual properties, Fundrise may be a good solution.
Here's a more updated chart that highlights Fundrise's historical investment returns.
Fundrise Investment Performance Stability
Nobody can predict future performance. However, based on Fundrise's historical investment performance, it looks like Fundrise will continue to have much less investment performance volatility than stocks and real estate ETFs.
Real estate ETFs act much more like stocks and should not be considered as effective a diversification strategy during a weak market. Just look at how the real estate ETFs performed so closely with the S&P 500 during the 2020 downturn.
If you're looking for real estate diversification, more stable returns, and less volatility, take a look at Fundrise. It's free to sign up and explore. Just make sure that if you do invest, you understand what you are investing in. Further, the money you do invest should money you do not need for several years.
Fundrise is a sponsor of Financial Samurai and Financial Samurai has invested over $134,000 in Fundrise funds. Sunbelt real estate has lower valuations and higher yields. It is a great way to diversify away from expensive San Francisco real estate, where Sam owns multiple properties.